Pritzker to Offer Tax Relief in Budget Speech | Government and politics

SPRINGFIELD — Governor JB Pritzker will offer an estimated $1 billion tax relief package aimed at mitigating the impact of inflation on Illinois consumers during his budget speech on Wednesday.

The “Illinois Family Relief Plan,” as it’s called, would suspend the 1% groceries tax for a year, suspend the automatic inflation-adjusted food tax increase fuels and would grant a 5% rebate on the property tax to eligible owners.

“At the same time as what has been record economic growth and dramatically different revenue forecasts for the state, we are experiencing a surge in inflation,” Vice Governor Andy Manar said in an interview with Capitol. News Illinois. “And this decline in purchasing power has affected working families in the state and the governor recognizes that.”






Governor JB Pritzker enters the House chamber for his 2020 State of the State address on January 29, 2020 at the Illinois Capitol in Springfield.


JERRY NOWICKI, CAPITOL NEWS ILLINOIS


According to the US Bureau of Labor Statistics, the 12-month inflation rate in the United States in December was 7%, the highest rate in nearly 40 years. This included a 29.3% increase in energy prices and a 6.3% increase in food prices.

Manar declined to provide many details about the upcoming budget proposal, except to say it will follow the same pattern as his previous budget proposals.

“I’m not going to go into specifics today because those are the governor’s proposals on Wednesday,” he said. “But the Governor is going to continue to lead the state on the path he set, which is to control spending, pay down the debt, get our bills caught up, work with lawmakers, and work with governments. people to solve big problems.”

But Manar said Pritzker thinks the state can afford to provide some tax relief because of its better fiscal management and better-than-expected revenue growth.

In November, the Governor’s Office of Management and Budget revised its revenue forecast for the current fiscal year upwards by $1.7 billion on the basis of strong revenue and tax revenue growth.

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“There has been collaborative work to restore fiscal stability to our state,” Manar said. “We now have balanced budgets, we have paid off our debts, we have controlled our expenses and we have caught up on our unpaid bills. And all of this is happening during the ongoing budget challenges of COVID-19. »

In Illinois, consumers don’t pay the usual retail sales tax on groceries, but instead pay a 1% “grocery tax,” which goes to local governments.

Pritzker’s proposal would suspend that 1% tax for a year while using public funds to reimburse local governments for revenues they would otherwise have obtained at an estimated cost of $360 million.

In 2019, the General Assembly passed a 10-year, $45 billion capital improvement program known as “Rebuilding Illinois.” It included a fuel tax increase as well as a provision for automatic increases each year to account for inflation.

This tax is set to increase on July 1, and Manar estimated it would have increased by about 2 cents per gallon. But he said the governor will offer to suspend that increase over the coming year, freezing the state tax for one year at its current level of 39.2 cents per gallon for gas and gasoline, and 46.7 cents per gallon for diesel.

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It would cost about $135 million that the state would otherwise take.

Manar said this would have no impact on the Department of Transportation’s road improvement plan in the next fiscal year and would not affect the funding of obligations backed by fuel tax revenues.

Finally, Manar said, Pritzker will offer to offer a 5% property tax refund to homeowners, which would be in addition to the 5% property tax deduction they can take on their corporate tax returns. Illinois. The refund would only be available to those eligible for the property tax credit.

It would cost around $475 million.

Pritzker is due to deliver a combined budget and state of the state address by noon Wednesday. It can be viewed live on the General Assembly audio-video page, https://ilga.gov/houseaudvid.asp.